The European Union (EU) is facing its lowest gas storage level for this time of year since records began in 2011, with gas storage at 72.4% as of October 3, 2023. This situation, combined with rising prices and weather risks, has put additional pressure on Europe's energy sector.
Forecast of Demand Reduction
IEEFA's analyses indicate that gas reserves may supply 7.3 billion cubic meters (bcm) less to the market compared to last winter. This shortfall, along with a complete ban on Russian LNG imports starting January 2027, could necessitate a 7% or 14 bcm reduction in winter gas demand.
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Negative Effects on the Market
While this does not mean that the EU's gas reserves will be completely depleted this winter, the declining storage levels will slow down gas withdrawals, which could have a significant impact during cold winter periods. Ending winter with low reserves will necessitate more refilling in the upcoming summer, leading to increased prices.
IEEFA estimates that covering the storage shortfall with additional gas imports will cost the EU around 3 billion euros. Due to the war between the United States and Iran, which has driven up gas prices, this cost will be 12% higher than a similar cost in 2025.
Moreover, the EU's reliance on gas storage has significantly increased. The share of storage in the EU's winter gas consumption has risen from 25% in 2021-22 to 30% in 2025-26.
Actions by European Countries
Some governments have taken measures to address these challenges. For example, the Netherlands approved a subsidy of 993 million euros for the state-owned company EBN Capital in June 2026 to bolster gas reserves. Additionally, the German government has instructed the gas importing company SEFE to store 8 terawatt-hours of gas to cover about 3% of the country's storage capacity.
Finally, the European Union Energy Commission has advised member states to continue reducing gas consumption, believing that demand reduction, rather than subsidies for storage, is the optimal solution to the current crisis.
